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The housing crisis has put pressure on the industry to modernize its methods. For decades, the ancient heritage of local controls was reflected in the industry's organization, methods and vision. The typical builder was an ex-carpenter who kept his office in his hat, drew plans on an old paper bag, clung to stick-by-stick construction techniques, operated with shoestring financing. Now dozens of major U.S. manufacturers and other large enterprises are moving into housing and land development with bulging bankrolls, big teams of experts and grand plans.
In partnership with two local builders, Westinghouse Electric is buying 8,000 acres south of San Francisco for a complete oceanside community. Beer-making Anheuser Busch recently bought 4,000 acres of Virginia countryside near Williamsburg and will develop an industrial town. Boise Cascade Corp. (1968 sales, $1 billion) has spread into almost every corner of the business: factory-built houses and mobile homes, on-site homes, apartments, leisure-home projects and urban renewal.
The high cost of conventional housing has spurred the development of a new kind of dwelling: the inexpensive, mass-produced "modular homes." This year scores of companies are bringing them out. Such instant housing consists of room-sized sections—generally 12 ft. wide and up to 60 ft. long—that are built, wired, piped and often decorated on cost-cutting factory assembly lines, then trucked up to 400 miles to a site, swung onto foundations by a crane, and fastened together. Builders claim that the modules are 10% to 25% less expensive than conventional houses.
The trend to modules was started by Canada's Alcan Design Homes, which brought out a line of completely furnished aluminum-clad houses priced from $8,500 to $12,500, not including the lot and foundation. Indiana-based National Homes, one of the biggest manufacturers of prefabricated houses, opened its first modular plant last January. In a major industrial counterattack, National has also moved into mobile-home construction.
Mobile homes have become the nation's main source of low-priced shelter. The mobiles come with wheels and a steel chassis, but once they are placed on foundations, few are moved again. Because they are factory built and beyond the reach of cost-boosting local regulations, mobile homes are cheap (average price: $6,000), if generally small (about 700 sq. ft.) and boxy. This year some 220 companies will produce 400,000 mobile homes, double the output of the industry only two years ago.
The Nixon Administration's main plan for helping housing is to stop inflation. Unless that is done, construction, and especially land costs will continue to rise, and mortgage money will become still scarcer and costlier. The result could be a housing famine that no politically conceivable amount of public subsidy could alleviate.
The Importance of Surplus